Unit-economics
and cohorts
What is
“unit economics”?
Unit economics
— it’s economics
of one unit
О ЧЕМ РЕЧЬ?
X₽ Y₽
User Acquisition Revenue
Продукт
Привлечение Доход
пользователей
Как соотносятся Y и X?
Как повысить Y/X?
Week 1
$1 000 spend $2 000 revenue
What is
wrong?
Week 2
$
$2 000 spend $2 500 revenue
$2 000 spend $2 500 revenue
Organic traffic
“free” $750 revenue
Influencers
$500 spend $750 revenue
Facebook
Loss-
making
$1 500 spend $1 000 revenue channel
• What is the acquisition cost
for each client?
• How much money we make
Unit economics from one client?
— it’s economics • Do our advertising costs pay
of one unit off?
• How much purchases should
the client make for
payback?
• What is the acquisition
CA
C
cost for each client?
• How much money we
Unit economics make from one client?
AR
PP
— it’s economics
U
• Do our advertising costs
of one unit pay off?
• How much purchases
should the client make
LT
V
for payback?
KEY METRICS
CPA Buyers ARPU
CAC = C1 = ARPPU =
C1 Users C1
CUSTOMER CONVERSION IN AVERAGE REVENUE
ACQUISITION COST FIRST PURCHASE PER PAYING USER
Users Period N
CR = 1 -
ARPPU Σ Revenues CHURN Users Period N-1
LTV = = RATE
Churn Users Period 0
Users Period N
LIFETIME
VALUE
RR =
RETENTION Users Period 0
RATE
More details
BASIC CONCEPTS
User Acquisition Revenue
“Black box”
CPA ARPU
Cost per Acquisition Average Revenue per User
EXAMPLE
Amount
Revenue 70 000 USD
Marketing costs 40 000 USD
Users 10 000
CPA = ?
ARPU = ?
EXAMPLE
Amount
Revenue 70 000 USD
Marketing costs 40 000 USD
Users 10 000
CPA = Marketing / Users = 40 000 / 10 000 = 4 USD
ARPU = Revenue / Users = 70 000 / 10 000 = 7 USD
IMPORTANT THING
СOGS = 0
(COST OF GOODS SOLD)
BASIC CONCEPTS
User Acquisition Margin
“Black box”
CPA AMPU
Cost per Acquisition Average Margin per User
SPOTIFY SUBSCRIPTION 7 USD
ARPU = ?
UBER RIDE 15 USD
ARPU = ?
CONVERSION
BUYERS CONVERSION TO BUYERS
С1 =
USERS Conversion in 1st purchase
С2, C3, …, Cn Conversion in next purchases
KEY METRICS
CPA ARPU
CAC = ARPPU =
C1 C1
CUSTOMER AVERAGE REVENUE
ACQUISITION COST PER PAYING USER
ANOTHER EXAMPLE
Amount
Users 10 000
C1 2%
CAC 30 USD
ARPPU 70 USD
Revenue = ?
Marketing = ?
ANOTHER EXAMPLE
Amount
Users 10 000
C1 2%
CAC 30 USD
ARPPU 70 USD
Buyers = Users * C1 = 10 000 * 2% = 200
Marketing = CAC * Buyers = 30 * 200 = 6 000 USD
Revenue = ARPU * Users = 70 * 200 = 14 000 USD
ANOTHER SOLUTION
Amount
Users 10 000
C1 2%
CAC 30 USD
ARPPU 70 USD
CPA = CAC * C1 = 30 * 2% = 0,6 USD
ARPU = ARPPU * C1 = 70 * 2% = 1,4 USD
Marketing = CPA * Users = 0,6 * 10 000 = 6 000 USD
Revenue = ARPU * Users = 1,4 * 10 000 = 14 000 USD
TASK FOR CONVERSION
SaaS with $20 monthly subscription
65 000 Ads views
2%
1 300 CTR (Click-through rate) from ads
13%
170 Installed an app
5
3% Used free version on Day 30
1 20% Purchased!
LET’S CALCULATE CAC
Cost per click = $2
?
Annual revenue = $20 * 12 = $240
Payback = $2564 / $240 ~ 10,8 years
Payback for 11 years!!
WHERE IS THE BOTTLENECK?
SaaS with $20 monthly subscription
65 000 Ads views
2%
1 300 CTR (Click-through rate) from ads
13%
170 Installed an app
5
3% Used free version on Day 30
1 20% Purchased!
Monthly revenue = $20
Payback = $267 / $20 ~ 13,4 months
Payback for
14 months!
Thanks for watching!
Max Kalyuzhnyi
facebook.com/max.kalyuzhnyi
https://www.linkedin.com/in/maximkalyuzhnyi/
